67 FR 46173, July 12, 2002 A-570-851 AR 02/00-01/01 NSR 02/00-01/01 Public Document IA/I/2/BCS MEMORANDUM TO: Joseph A. Spetrini Acting ssistant Secretary for for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary for Import Administration SUBJECT: Issues and Decision Memorandum for the Final Results of the Antidumping Duty New Shipper and Administrative Reviews on Certain Preserved Mushrooms from the People's Republic of China - February 1, 2000, through January 31, 2001 Summary We have analyzed the comments of the interested parties in the new shipper and administrative reviews of the antidumping duty order covering certain preserved mushrooms from the People's Republic of China ("PRC"). As a result of our analysis of these comments, we have made changes in the margin calculations as discussed in the "Margin Calculations" section of this memorandum. We recommend that you approve the positions we have developed in the "Discussion of the Issues" section of this memorandum. Below is the complete list of the issues in this review for which we received comments from parties: Issue 1: Surrogate Value Selection for Fresh Mushrooms Issue 2: Surrogate Value Selection for Furnace Oil Issue 3: Surrogate Value Selection for Straw Issue 4: Surrogate Value Selection for Cans and Lids Issue 5: Whether to Use Data Contained in More Current Financial Reports Submitted for Two Indian Producers of the Subject Merchandise Issue 6: How to Treat Water Costs Issue 7: Whether to Use Domestic Rather than Import Surrogate Values Issue 8: Whether to Inflate Certain Surrogate Values Which Cover a Portion of the Period of Review Issue 9: Whether to Inflate U.S. Dollar-Denominated Surrogate Values to the POR Issue 10: Whether to Adjust Factors Reported by Raoping Xingyu for Certain Can Sizes Issue 11: Whether to Adjust Factors Reported by Shantou Hongda and Shenxian Dongxing Issue 12: The Use of Information Contained in the Petitioners' Case Brief Background On March 6, 2002, the Department of Commerce ("the Department") published the preliminary results of the third new shipper review and preliminary results and partial rescission of the second administrative review of the antidumping duty order on certain preserved mushrooms from the PRC. See Certain Preserved Mushrooms from the People's Republic of China: Preliminary Results of New Shipper Review and Preliminary Results and Partial Rescission of Second Antidumping Duty Administrative Review, 67 FR 10128 (March 6, 2002) ("Preliminary Results.") The products covered by this order are certain preserved mushrooms whether imported whole, sliced, diced, or as stems and pieces. The period of review ("POR") is February 1, 2000, through January 31, 2001. We invited parties to comment on our preliminary results of review. On March 26, 2002, and in accordance with 19 CFR 351.301(c)(3)(ii), one of the four respondents, Gerber (Yunnan) Foods, Co. ("Gerber") submitted additional publicly available information for the Department's consideration in the final results. On April 5, 2002, another respondent, Raoping Xingyu Foods Co., Ltd. ("Raoping Xingyu") submitted its case brief. (1) On May 29, 2002, the parties withdrew their requests for a hearing. The petitioners and Gerber submitted their case and rebuttal briefs on June 4, and June 10, 2002, respectively. Raoping Xingyu did not submit a rebuttal brief. The other two respondents, Shantou Hongda Corporation ("Shantou Hongda") and Shenxian Dongxing Foods Co., Ltd. ("Shenxian Dongxing") did not file case or rebuttal briefs. On June 21, 2002, we informed the parties to this proceeding that we considered the data contained in three attachments to the petitioners' case brief to be new factual information pursuant to 19 CFR 351.301(c)(3)(ii). However, we also informed the parties that we considered this information to be relevant to this proceeding and had decided to consider it in these final results. Therefore, because it was filed in an untimely manner in this proceeding, we provided the respondents until June 26, 2002, to submit comments on that new factual information and the petitioners' arguments in reliance on that information. On June 26, 2002, Gerber submitted comments on the use of that information in this proceeding. Margin Calculations We calculated export price and normal value using the same methodology stated in the preliminary results, except as follows: 1. We calculated average surrogate percentages for factory overhead, selling, general and administrative expenses, and profit using the 2000- 2001 financial reports of Agro Dutch Foods Ltd. ("Agro Dutch") and Flex Foods Ltd. ("Flex Foods"), and the 1999-2000 financial report of Himalya International Ltd. ("Himalya"). See Comment 4, below, and surrogate value calculation memorandum for further discussion. 2. We have corrected an error which affected the amount of miscellaneous fixed assets to include in the factory overhead percentage derived from data contained in Himalya's 1999-2000 financial report of an Indian producer of the subject merchandise. 3. To value fresh mushrooms, we calculated a simple average price based on data contained in the 2000-2001 financial report of Premier Explosives Ltd. ("Premier"), the 1999-2000 financial report of Agro Dutch, and February 2000-January 2001 price data contained in the Economic Times of India. See Preliminary Results for further discussion of the reasons why we have not used Premier's financial data for deriving surrogate percentages. See also Comment 1, below, and surrogate value calculation memorandum for further discussion. 4. For Shantou Hongda and Gerber, we used price data contained in the 1999-2000 financial report, rather than in the 2000-2001 financial report of Agro Dutch, to calculate an average POR price for a 68-ounce can, since the 1999-2000 financial report contained specific price data in that report. For Raoping Xingyu, we used its reported market-economy prices to value this input. See also Comment 4, below, and surrogate value calculation memorandum for further discussion. 5. To value spawn and cattle manure, we used data from the 2000-2001 financial reports of Agro Dutch and Flex Foods. 6. To value straw, we calculated an average price based on the wheat straw value from Agro Dutch's 2000-2001 financial report and the general straw value from Flex Foods' 2000-2001 financial report. See Comment 3, below, and surrogate value calculation memorandum for further discussion. 7. To value grain and super phosphate, we used data from Flex Foods' 2000- 2001 financial report. 8. To value super potassium, we used a POR value from the publication Chemical Weekly. 9. Since the surrogate value for salt was not contemporaneous with the POR, we adjusted this value for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics. 10. With respect to Gerber, we have corrected arithmetical errors which affected the calculation of electricity costs associated with its spawn production, the cost of the mushrooms it purchased for use in the brining stage of production, and the cost of cans it used in the processing stage of production. 11. We have removed language in the SAS program used for Raoping Xingyu, which overwrote data for two control numbers, and have assigned to each distinct product code the factors contained in Raoping Xingyu's May 9, 2002, supplemental response. In addition we have corrected the scrap value in Raoping Xingyu's margin program. 12. To account for different drained weight capacities of various sizes of cans used by one respondent (i.e., Shantou Hongda) and purchased by another respondent (i.e., Raoping Xingyu), we have calculated for each can size a price per drained weight based on the price per piece, obtained from either surrogate value data or from reported market-economy prices. Since Shenxian Dongxing produced its own cans and Gerber reported its can usage on a piece basis rather than on a kilogram basis, we did not need to make the above-noted adjustment for those companies. See Comments 4 and 10, below for further discussion. Discussion of the Issues Comment 1: Surrogate Value Selection for Fresh Mushrooms In the preliminary results, we used daily price data for fresh mushrooms contained in February 1, through July 31, 2000, issues of the Economic Times of India, and mushroom price data from the 1999-2000 financial reports of Agro Dutch and Premier. Although the respondent, Gerber, submitted a worksheet containing daily mushroom price data from the Economic Times of India for additional months (i.e., January 2000, and August 2000 through January 2001), we did not use the prices on that worksheet, for which Gerber did not provide supporting publicly available data, because we could not determine the accuracy of the data. Since the preliminary results, Gerber submitted publicly available data from the Economic Times of India for the fresh mushroom prices on the worksheet which we did not use in the preliminary results. Gerber contends that the Department should use in the final results only the fresh mushroom values from the Economic Times of India because these prices, unlike the price data obtained from the financial reports of Agro Dutch and Premier (i.e., two Indian producers of the subject merchandise), best represent the industry as a whole. Additionally, Gerber argues that the Department should not use the mushroom price data from the financial reports of Agro Dutch and Premier to value this input because these companies harvest and sell mushrooms of a superior quality when compared to the mushrooms used for canning by the respondents. If the Department decides to continue using both the data in Economic Times of India and the financial reports to calculate an average price for mushrooms, then Gerber requests that the Department calculate a price using a weighted-average, not a simple average, calculation method, because a simple average method unreasonably gives too much weight to the prices contained in the two producers' financial reports. In addition, Gerber maintains that if the Department decides to continue to incorporate data from the financial reports to value this input, then it must use data, where available, from the 2000-2001 financial reports of three Indian producers (Agro Dutch, Premier, and Flex Foods), which Gerber submitted after the preliminary results. The petitioners contend that the Department should only use the data from the financial reports of Agro Dutch, Premier, and Flex Foods, because those reports provide producer-specific and tax-exclusive prices for valuing fresh mushrooms. The petitioners argue that the fresh mushroom prices from the Economic Times of India appear to be only estimated market values (which may also be tax-inclusive) and do not appear to be specific to an actual mushroom type. Department's Position: We agree in part with Gerber and have relied on the February 2000-January 2001 price data in the Economic Times of India, the price data contained in the 2000-2001 financial report of Premier, and the 1999-2000 financial reports of Agro Dutch and Flex Foods to calculate a simple average price for this input. (Since no fresh mushroom values were contained in the 2000- 2001 financial reports of Agro Dutch and Flex Foods, we continued to use data from these companies' 1999-2000 financial reports since they covered a portion of the POR.) In response to the petitioners' allegation that the prices in the Economic Times of India are only estimated market values, we note that there is no indication in this periodical that the prices for mushrooms are daily quotes rather than daily prices. We also note that for other commodities listed in this periodical (i.e., Mumbai oilseeds), this periodical indicates that the rate for that commodity is a quote. Therefore, we find no compelling reason to reject the mushroom price data in the Economic Times of India. With respect to the petitioners' contention that the prices in the Economic Times of India appear to be tax-inclusive, we find no information in this publication which indicates that the prices for mushrooms are tax- inclusive. Absent this information, we must presume that the prices for mushrooms in this periodical are tax-exclusive. However, unlike the information provided for mushrooms, the price descriptions for other commodities in this publication (i.e., edible and non-edible oils), indicate that the prices of those commodities are tax-inclusive. We noted no such price description for mushrooms. In addition, we note that other Indian periodicals (i.e., Chemical Weekly), appear to contain tax- exclusive domestic prices for certain commodities. Therefore, we find no compelling reason to reject the mushroom price data in the Economic Times of India. Although we agree with the petitioners that the mushroom prices in the Economic Times of India do not appear to be specific to an actual mushroom type, we note that mushroom prices contained in the 2000-2001 financial reports of Agro Dutch, Flex Foods, and Premier also do not appear to be specific to an actual mushroom type. Therefore, we find the mushroom data contained in both the Economic Times of India and in the financial reports to be equally representative of prices for this input. Finally, in response to Gerber's request that we calculate a weighted- average rather than simple average price for this input, we have continued to use the simple average approach employed in the preliminary results because, unlike the data contained in the financial reports, the data contained in the Economic Times of India is not based on quantities. Therefore, a weighted-average calculation is not feasible when based, in part, on this data. Comment 2: Surrogate Value Selection for Furnace Oil In the preliminary results, we used price data from the 1999-2000 financial report of Hindustan Lever Ltd. ("Hindustan") to value this input, because that financial report was the only resource that provided us with a value for this input, which was also contemporaneous with the POR. Raoping Xingyu contends that the Department should not use the value from Hindustan's financial report to value this input because the respondent alleges that it uses a different quality of oil than that used by Hindustan. The respondent bases its argument on the fact that the price Raoping Xingyu pays for its furnace oil is significantly less than the surrogate value price obtained from Hindustan's financial report and the observation that Hindustan may use a higher quality of oil because it produces many products (with mushrooms being only a minor portion of its total production). Therefore, the respondent urges the Department to use as an alternative price a March 1995 Indian surrogate value from the publication Energy, Prices and Taxes. The petitioners maintain that Raoping Xingyu has provided no evidence on the record in support of its claim that the furnace oil it uses is vastly different from the furnace oil used by the Indian producer Hindustan, for purposes of obtaining a surrogate value from its financial report. In addition, the petitioners contend that the alternative value proposed by the respondent is significantly less contemporaneous to the POR than the value the Department assigned to this input in the preliminary results. Department's Position: We disagree with Raoping Xingyu and have continued to use the 1999-2000 price data from Hindustan's financial report rather than the 1995 price from Energy, Prices and Taxes, to value furnace oil for the following two reasons. First, we find that the price from Hindustan's financial report is more contemporaneous to the POR than the price from Energy, Prices and Taxes. In addition, after examining information contained in Hindustan's financial report, we find no basis which supports Raoping Xingyu's contention that the furnace oil Hindustan uses is not comparable to the furnace oil Raoping Xingyu uses in its production process. The mere fact that there is a difference in the price of furnace oil contained in Hindustan's financial report and in Energy, Prices and Taxes does not necessarily indicate that there is an issue with regard to the quality of the furnace oil contained in either resource, especially when one recognizes that the price from Energy, Prices and Taxes is at least four years older than the price from Hindustan's financial report. Absent any supporting documentation or resources, we find that we cannot agree with Raoping Xingyu's claim that it uses furnace oil which is vastly different from that used by Hindustan. Thus, we are continuing to value this input using data from Hindustan's financial report. Comment 3: Surrogate Value Selection for Straw In the preliminary results, we used three straw prices from the financial reports of Flex Foods, Agro Dutch, and Premier to derive an average price. The data included prices for both paddy and wheat straw. The petitioners maintain that the Department should not use the price for paddy straw to calculate an average price because the respondents in this proceeding have stated in their responses that they use higher-quality types of straw such as rice and wheat straw. The respondents did not comment on this issue. Department's Position: We agree with the petitioners. For the respondents Raoping Xingyu, Shantou Hongda, and Shenxian Dongxing, the evidence on this record indicates that each respondent used rice straw to produce the subject merchandise during the POR (see page D-7 of Raoping Xingyu's May 26, 2001, Section D response, page D-7 of Shantou Hongda's Section D response, and page D-7 of Shenxian Dongxing's Section D response). With respect to Gerber, the evidence on this record indicates that it used straw in general to produce the subject merchandise during the POR (see exhibit 6 of Gerber's November 13, 2001, supplemental questionnaire response). Since no respondent indicated that it used paddy straw to produce the subject merchandise, we have removed paddy straw from our calculation and have used in our calculation only the higher-quality wheat straw price from Agro Dutch's 2000-2001 financial statement, and the general straw price from Flex Foods' 2000-2001 financial statement. Comment 4: Surrogate Value Selection for Cans and Lids In the preliminary results, we calculated a general non-specific can price from the 1999-2000 financial report of Agro Dutch and applied that price to both the reported can and lid weight factors reported by the respondents. The petitioners contend that for one respondent (i.e., Raoping Xingyu), the Department should use Raoping Xingyu's reported market economy prices for cans and lids in the final results instead of using the surrogate value from the preliminary results because this respondent imported cans and lids in substantial quantities during the POR. In support of its argument, the petitioners cite to Final Results of Antidumping Duty Administrative Review: Certain Helical Spring Lock Washers from the People's Republic of China, 62 FR 61794, 61795-61796 (November 19, 1997). For the other respondents, where applicable, the petitioners contend that the Department should use data contained in the 1999-2000 financial report of Agro Dutch to derive a price for 68-ounce cans and lids based on the methodology as proposed in the petitioners' case brief. Specifically, where data in Agro Dutch's 1999-2000 financial report combines quantity and value figures for two different size cans with their lids (i.e., can sets), the petitioners maintain that the Department should extrapolate a can set price for 68-ounce cans based on the known quantity and value amounts for 68-ounce cans contained in the overall quantity and value figures for cans in Agro Dutch's financial report. Gerber maintains that the Department should use a more updated surrogate value for cans obtained from Agro Dutch's 2000-2001 financial report and apply this value, instead of the petitioners' proposed value, to this input. In addition, Gerber points out that instead of applying the surrogate value obtained from Agro Dutch's financial report to both its can and lid weight factors, the Department should have only applied the surrogate value to the combined weight reported for its can and lid since the surrogate value is for a can set (i.e., the can with the lid). Department Position: We agree in part with the petitioners and Gerber. Unlike the data contained in Agro Dutch's 2000-2001 financial report, data contained in Agro Dutch's 1999-2000 financial report provides quantity and value figures for imported 68-ounce cans which allows us to derive a surrogate value for this input on a can size-specific basis. We disagree with the petitioners that we should also use data for domestically-supplied 68- ounce cans contained in this report since that data is combined with, and cannot be separated from, 4-ounce can quantity and value figures also contained in that report. Therefore, we have relied on the can-specific data contained in Agro Dutch's 1999-2000 financial report to derive a price for 68- ounce cans. Where applicable, we have applied this value to the combined weight reported by the respondents for the can and lid since the surrogate value is for a can set. Comment 5: Whether to Use Data Contained in More Current Financial Reports Submitted for Two Indian Producers of the Subject Merchandise In the preliminary results, we used the audited 1999-2000 financial data of Agro Dutch, Flex Foods, and Himalya to value factory overhead and selling, general, and administrative ("SG&A") expenses. However, to value profit, we only used the 1999-2000 financial data of Agro Dutch and Himalya, because Flex Foods did not realize a profit during that year. Since the preliminary results, Gerber submitted the 2000-2001 financial reports for Agro Dutch and Flex Foods and has requested that we use the more current data for these companies, combined with Himalya's 1999-2000 financial data, to value factory overhead, SG&A and profit. The petitioners contend that the Department should continue to use the 1999-2000, not the 2000-2001, financial reports for Agro Dutch and Flex Foods because data contained in each company's 2000-2001 financial reports indicates that each company underwent major changes such that each of their financial experiences were aberrational during 2000-2001. In the case of Agro Dutch, the petitioners claim that data in its 2000- 2001 financial report indicates that this company made fewer sales during 2000-2001 because it was forced to set up its own can manufacturing facility as a result of experiencing quality control problems with the cans supplied from a domestic can manufacturer. Moreover, the petitioners state that data in its financial report also indicates that Agro Dutch undertook measures to expand its capacity during 2000-2001 and in so doing, reduced its production. In addition, the petitioners point out that the data in its 2000-2001 financial report also indicates that Agro Dutch switched from using an electrical chiller to using a rice-husk fired refrigeration system and shifted its sourcing of raw materials by dramatically increasing its imports of cans used to produce the subject merchandise. Therefore, the petitioners assert that because of the events described above which affected Agro Dutch's performance during 2000-2001, the Department should not use Agro Dutch's financial data during 2000- 2001, because it is skewed and does not represent that company's normal business activities associated with producing the subject merchandise. In the case of Flex Foods, the petitioners claim that data in its 2000- 2001 financial report is also unusable because this company experienced poor performance and growth in its food business and decided to diversify its business by entering into non-subject merchandise areas such as information technology and telecommunications through the acquisition of another company called Cincom Systems India Pvt. Ltd. ("Cincom"). The petitioners also state that data in Flex Foods' 2000-2001 financial report indicates that Flex Foods' activities in Cincom are the main business of Flex Foods. Therefore, the petitioners assert that because of Flex Foods' poor performance and recent venture into the information technology industry during 2000-2001, the Department should not use Flex Foods' financial data during 2000-2001, because it is also skewed and does not represent that company's normal business activities associated with producing the subject merchandise. Department's Position: We agree with Gerber and have used the data from Agro Dutch's and Flex Foods' 2000-2001 financial reports, which is more contemporaneous to the POR than those two companies' 1999-2000 reports, to value factory overhead and SG&A expenses for the reasons mentioned below. With regard to the financial condition of and/or experiences at Agro Dutch during 2000-2001, we find no compelling reason to reject Agro Dutch's most recent financial data simply because it decided to change its method of can sourcing due to quality control problems, set up its own can manufacturing facility, expand its production capacity, and change its energy system. Although the data indicates that its export sales fell dramatically from 1999-2000 to 2000-2001, its domestic sales doubled in value when comparing data from those same time periods. Whether a company is able to match or surpass its previous overall economic performance or performance in its export and/or domestic market in subsequent years should not be the sole reason for rejecting that company's data for purposes of selecting surrogate percentages. As the petitioners are aware, the Department has relied on Agro Dutch's financial report in prior segments of this proceeding for purposes of calculating surrogate percentages, because Agro Dutch is a known producer of the subject merchandise. We find no basis for now rejecting the use of this company's financial data simply because it was forced to make business decisions which had an impact on its performance during the 2000- 2001. Moreover, a closer examination of data contained in Agro Dutch's 1999-2000 financial reports indicates that the company also expanded capacity during that time period as well, taking out sizeable loans in order to finance that project. In addition, we note that the impact of the changes mentioned above at Agro Dutch during 2000-2001 did not result in this company being designated a sick industrial company by its auditors under the 1985 Sick Industrial Companies Act. Such a designation may have provided us with evidence that Agro Dutch's financial data may have been unuseable. Therefore, we find that the economic performance of this company during 2000-2001 remains a good indicator of the costs experienced by Indian producers of the subject merchandise. With regard to Flex Foods, we also find no compelling reason to reject Flex Foods' most recent financial data simply because of its recent business decision to acquire a company which is not involved in producing the subject merchandise. Whether a company decides to expand its business operations into other areas which do not involve producing the subject merchandise should not be a reason for rejecting that company's data for purposes of selecting surrogate percentages. In light of this event mentioned above, data contained in Flex Foods' 2000-2001 financial statement clearly shows that it generated 60 percent of its sales income for the year by selling mushrooms and 40 percent of its sales income by selling freeze dried products. Therefore, Flex Foods continued to be an extremely active producer of the subject merchandise when one compares the financial data of this company during the periods 1999-2000 to 2000-2001, even though it expanded into non-subject merchandise areas (i.e., herbs and green peppers) during 1999-2000 and 2000-2001. The Department has also relied on Flex Foods' financial report in prior segments of this proceeding for purposes of calculating surrogate percentages, because Flex Foods is a known producer of the subject merchandise. Comment 6: How to Treat Water Costs In the preliminary results, and consistent with our methodology used in prior reviews of the subject merchandise, we considered the costs for water to be included in factory overhead in the Indian financial statements which we used to calculate factory overhead, SG&A expenses, and profit. See Preliminary Results of New Shipper Review: Certain Preserved Mushrooms from the People's Republic of China, 66 FR 30695, 30697 (June 7, 2001). The petitioners contend that the Department should separately value water rather than treat its costs as a part of factory overhead, based on the Department's treatment of this input in recent PRC reviews. In support of its argument, the petitioners cite to Preliminary Results of Antidumping Duty New Shipper Review: Petroleum Wax Candles from the People's Republic of China, 67 FR 3478 (January 24, 2002) ("Petroleum Wax Candles"); and Notice of Final Determination of Sales at Less Than Fair Value: Folding Metal Tables and Chairs from the People's Republic of China, 67 FR 20090 (April 24, 2002) ("Folding Metal Tables and Chairs"). Gerber maintains that the Department should continue to treat water as a part of factory overhead in these reviews because the financial reports of Indian producers of the subject merchandise appear to treat water as an overhead expense rather than as a direct material expense. Since the Department is using data from those financial reports to determine a surrogate percentage for factory overhead, Gerber maintains that there is no evidence in the those financial reports which indicates that water should be valued separately. Department's Position: We agree with Gerber and have continued to treat the costs for water as part of factory overhead, rather than value this input separately, based on our analysis of data contained in the financial reports of two Indian producers of the subject merchandise (i.e., Agro Dutch and Flex Foods), which we are using to derive a surrogate percentage for factory overhead. Based on data contained in each of these producers' financial reports, water does not appear to be treated as a direct material or to be included in the total cost amount reflected for raw materials consumed based on the cost breakdown information provided in each of these producers' financial reports. In particular, Flex Foods' financial report provides a detailed cost breakdown of each input included in the total cost of raw materials consumed, and nowhere in this breakdown is water treated as a raw material cost. In addition, we have no information on the record that would allow us to separate the cost for water from factory overhead. Therefore, by not separately valuing water we avoid the possibility of double counting this cost since it is already included in factory overhead. With respect to Department decisions in Petroleum Wax Candles and Folding Metal Tables and Chairs, although water was valued separately and not included in factory overhead in those cases, this input was not at issue. In this case, the available data include water costs in overhead. Comment 7: Whether to Use Domestic Rather than Import Surrogate Values In the preliminary results, for five material inputs (2) we calculated an average price based on data contained in two Indian publications (i.e., Chemical Weekly and Monthly Statistics of the Foreign Trade of India ("Monthly Statistics")) because we were able to obtain prices equally contemporaneous to the POR from both publications. The petitioners maintain that the Department should only use the data from Chemical Weekly to value those inputs because the values from Monthly Statistics distort the accuracy of the values for those inputs. Specifically, the petitioners contend that the domestic prices from Chemical Weekly are more reliable than the import prices from Monthly Statistics because the data compiled in Monthly Statistics may contain clerical errors (i.e., misclassification of goods and/or inaccurate entry prices). In addition, the petitioners contend that the prices in Chemical Weekly not only reflect domestic prices but are also preferable based on Department practice. In support of its argument, the petitioners cite to Final Results of Antidumping Duty Review: Creatine Monohydrate from the People's Republic of China, 67 FR 10892 (March 11, 2002) and accompanying Decision Memorandum at Comment 1 ("Creatine"); Final Results and Final Partial Rescission of Antidumping Duty Administrative Review: Sulfanilic Acid from the People's Republic of China, 67 FR 1962 (January 15, 2002) ("Sulfanilic Acid"); and Final Results of Antidumping Duty New Shipper Administrative Review: Pure Magnesium from the People's Republic of China, 63 FR 3085, 3087 (January 21, 1998) ("Pure Magnesium"). Gerber requests that the Department use the most current data on the record among import and domestic prices for purposes of selecting surrogate values. Department's Position: We disagree with the petitioners that in these reviews we should be selecting only the domestic value (adjusted for taxes) from Chemical Weekly for the five inputs at issue. In Creatine, the Department explained that it may reject domestic prices if there is evidence that the domestic prices are distorted by certain factors, such as high tariffs (see Creatine and accompanying Decision Memorandum at Comment 1). In Creatine, we determined that if no distortion existed, we would use only domestic prices for valuing all inputs. In these reviews, we compared the domestic value (net of taxes) to the import value for each of the five inputs at issue. Unlike the situation in Creatine (where the Department found that the domestic value was lower or roughly equal to the import value), we find that for four of these inputs (i.e., citric acid, boric acid, formaldehyde, and magnesium sulfate), the domestic value is either higher or lower than the import value. For the remaining input (i.e., calcium carbonate), we find that the domestic value is only slightly higher than the import value. In this case, however, we find no basis to conclude that either import or domestic prices are more reliable for purposes of valuing the above-referenced inputs. Thus, we have continued to use an average price for these inputs based on both the domestic and import value. In response to the petitioners' arguments involving Sulfanilic Acid and Pure Magnesium, neither of these cases is on point for these reviews. Unlike the situation in Sulfanilic Acid, we have no evidence in this record which indicates how market factors in India may have influenced or had an impact on the domestic values for these five inputs (see Sulfanilic Acid and accompanying decision memorandum at Comment 1). Furthermore, with respect to the Department's decision in Pure Magnesium to use where possible only domestic tax-exclusive prices, the Department stated in the Creatine decision that it does not have an unconditional preference for using domestic values over import values to value factors of production (see Creatine and accompanying decision memorandum at Comment 1). Comment 8: Whether to Inflate Certain Surrogate Values Which Cover a Portion of the POR The petitioners argue that for certain surrogate values which are current for only a couple of months of the POR, the Department should adjust them for inflation so that those surrogate values are as representative of the POR as possible. Gerber states that for those input values which are current during the POR, it is unnecessary for the Department to apply inflators to those values since they are applicable during the POR. Department's Position: We agree with Gerber and have continued to consider surrogate values which cover a portion of the POR to be sufficiently contemporaneous with the POR that no inflation of those values is required or necessary. In accordance with Department practice, the purpose of using inflators is to adjust surrogate values that are outside the POR so that they become values which are applicable during the POR. See Final Results and Partial Rescission of Fifth New Shipper Review: Brake Rotors from the People's Republic of China, 66 FR 44331 (August 23, 2001), which cites to Preliminary Results and Partial Rescission of Fifth New Shipper Review: Brake Rotors from the People's Republic of China, 66 FR 29080, 29084 (May 29, 2001)). Unless there is evidence that high inflation is a factor to consider in the analysis, our view is that the purpose of using inflators should be to adjust values that are not applicable during the POR so that they become values that are applicable during the entire POR. Therefore, to establish whether India experienced high inflation during the POR of these reviews, we examined India's consumer price and wholesale price indices during the POR (see 1999-2001 issues of the International Monetary Fund's International Financial Statistics). Based on our analysis of these price indices, we have determined that the Indian economy was not experiencing high inflation during the POR. Therefore, we find no reason to adjust for inflation those surrogate values which are already applicable during the POR. Comment 9: Whether to Inflate U.S. Dollar-Denominated Surrogate Values to the POR In the preliminary results, we used a December 1999 price from Chemical Market Reporter to value calcium phosphate. Since the value from Chemical Market Reporter was in U.S. dollars and contemporaneous with the POR, we did not inflate this value. The petitioners request that we inflate this value to the POR. Department's Position: With respect to the petitioners' argument that the Department should adjust this value for inflation, the Department has stated a clear preference not to inflate U.S. dollar-denominated values if those values are contemporaneous with the POR. See Notice of Final Determination of Sales at Less Than Fair Value from the People's Republic of China, 64 FR 71104 (December 20, 1999) at 71109. In this instance, the value we obtained from Chemical Market Reporter is applicable during December 1999. This value is within two months of the POR in this case. Therefore, we find the value to be sufficiently contemporaneous with the POR and an inflation adjustment to be inappropriate in this instance. Comment 10: Whether to Adjust Factors Reported by Raoping Xingyu for Certain Can Sizes In its response, Raoping Xingyu indicated that it used the same per-unit input amounts to produce the subject merchandise contained in 68-ounce cans as it did to produce the subject merchandise contained in 62 and 64- ounce cans. With respect to the valuation of the can input, we valued the can based on the weight of the can. We accepted Raoping Xingyu's allocation methodology in the preliminary results. The petitioners claim that in reporting its per-unit direct material, energy, labor, and packing material input amounts for certain can sizes (i.e., 62, 64 and 68-ounce cans), Raoping Xingyu incorrectly reported the same per-unit input amount for each can size by not taking into account the different drained weight of each can size. Therefore, the petitioners request that the Department adjust the per-unit amounts reported for the 62 and 64-ounce can sizes in order to account for the different drained weight of each can size. Raoping Xingyu indicated in its questionnaire response that the per-unit input amounts it reported for its 68-ounce cans also applied for its 62 and 64-ounce cans, because it used them as well. Therefore, Raoping Xingyu stated that no adjustments were necessary to its data. Department's Position: We disagree in part with the petitioners. In its questionnaire response, Raoping Xingyu stated that it used the three can sizes mentioned above interchangeably and did not maintain records which would enable it to report per-unit input amounts for each of these can sizes. Based on data contained in this record, we have no basis to conclude otherwise. However, after further examining the average per-unit can weight submitted by Raoping Xingyu for 62, 64, and 68-ounce cans and the per-unit can weight reported for other can sizes (i.e., 4, 8 and 16-ounce cans), we find that the per-unit can amounts cannot be applied to the market prices it reported without accounting for the different drained weight of each can size because Raoping Xingyu reported the per-unit can factor for each can size. Therefore, for purposes of valuing its can usage amounts in the final results, we have adjusted the prices paid by Raoping Xingyu for this input from a per-piece basis to a price per drained weight in order to account for the drained weight of each can size. We have also performed this adjustment to Shantou Hongda's per-unit can weight amounts because this respondent also did not account for the drained weight when reporting its per-unit can amount. For the other two respondents (i.e., Shenxian Dongxing and Gerber), since those respondents either produced their own cans or reported their can usage on a piece basis rather than on a kilogram basis, we did not need to make the above-noted adjustment. Comment 11: Whether to Adjust Factors Reported by Shantou Hongda and Shenxian Dongxing For purposes of reporting per-unit factor amounts for the can size of mushrooms in its response, each respondent calculated input-specific amounts by dividing the total amount of each input used in the production process by the total production of all mushroom styles which had the same can size. We accepted both respondents' allocation methodology in the preliminary results. The petitioners argue that the Department should recalculate per-unit amounts for certain material and energy inputs reported by these two respondents in their third supplemental responses (3) because each respondent used in its allocation methodology an overstated production quantity amount based on the mushroom style contained in the can size which it sold to the United States during the POR. The petitioners further maintain that the Department should also adjust the packed quantity amount each respondent used in its allocation methodology to derive its per-unit amounts for certain packing material and labor inputs because each respondent failed to provide supporting documentation in its responses for that quantity figure. The respondents did not comment on this issue. Department's Position: We disagree with the petitioners and have relied on the per-unit input amounts each respondent reported in its third supplemental questionnaire responses in these final results. After examining the production quantities each respondent used in its allocation methodologies, we find that both respondents used a production quantity which included various mushroom styles that corresponded with the total consumption amount of the input associated with the mushroom styles packed in the same can size. Specifically, the evidence on this record demonstrates that based on its production records, neither respondent was able to determine the input amounts it actually used to produce its mushrooms on a can-size and mushroom style-specific basis. Therefore, each respondent allocated the total input amounts associated with producing all mushroom styles contained in the same can size over the total POR production of all mushroom styles. Since those mushroom styles were placed in the same can size, each respondent reported its per-unit input amounts on a can size- specific rather than on mushroom-style and can size-specific basis. With respect to the packed quantity figure each respondent used in its allocation methodology to derive its per-unit amounts for certain packing material and labor inputs, we did not specifically request that each respondent provide supporting documentation for those figures in our supplemental questionnaires. Therefore, we do not have a sufficient basis to find that those quantity figures are in error based on data contained in the record of this proceeding. Since we have decided not to conduct verification in these reviews, we have accepted the respondents' reported per-unit input amounts and relied on them in the final results. Comment 12: The Use of Information Contained in the Petitioners' Case Brief On June 21, 2002, we informed the parties to this proceeding that we considered the data contained in three attachments to the petitioners' case brief to be new factual information pursuant to 19 CFR 351.301(c)(3)(ii). We informed the parties that we had decided to consider this information in these final results. Because this data was filed in an untimely manner in this proceeding we provided the respondents with an opportunity to submit comments on the data and the petitioners' arguments in reliance on that information. Gerber claims that the petitioners had ample opportunity prior to filing their case brief to submit factual information in this proceeding. For this reason, Gerber objects to the Department's use of this information in this proceeding. Moreover, Gerber contends that the petitioners were not required to demonstrate good cause for submitting this new factual information in their case brief. Furthermore, Gerber argues that by considering this information to be relevant to this proceeding, the Department's use of this data in this proceeding is unfair to the respondents and establishes a poor precedent. Absent re-opening the record of this proceeding and allowing Gerber the opportunity to submit its own new factual data, Gerber requests that the Department reject the petitioners' data included in their case brief. Department's Position: The Department has the discretion pursuant to 19 CFR 351.302(b) to extend any time limit for good cause, and that includes extending the time in which we will accept new factual information. As a rule, the Department does not allow the filing of information in this manner, but in this case we determined that this information did nothing but clarify data already on this record by providing a further breakdown of a surrogate value for tin cans. We believe no harm to the parties comes from us using this data, which is nothing more than more detailed information from the same financial report which is already on the record. Specifically, in the preliminary results, we used aggregate quantity and value data for tin cans contained in Agro Dutch's 1999-2000 financial report to derive a surrogate value for tin cans. This new factual information now allows the Department to calculate a surrogate value for a specific can size (i.e., 68-ounce cans) which is used by three respondents in this proceeding. Since this new factual information allows the Department to more accurately value the can sizes utilized by the respondents in this case, we consider it to be relevant. (The other two attachments at issue in petitioners' case brief contained Department memoranda from a prior segment of this proceeding which further identified the specific can size and general weight of that can size reflected in the more detailed pages from Agro Dutch's 1999-2000 financial report.) Furthermore, we note that Gerber does not argue to the substance of this information. In fact, this information was on the record of prior segments of the proceeding, and we do not believe the parties can claim that this information is unreliable or otherwise irrelevant, as we actually relied upon this data when valuing tin cans in those prior reviews. (See Comment 4 for a further discussion of how we valued tin cans in this proceeding.) See Memorandum to the File from David Goldberger, 1999-2000 Financial Statement of an Indian Producer of Certain Preserved Mushrooms, dated August 21, 2000, (which is part of the record of the Final Results of First New Shipper Review and First Antidumping Duty Administrative Review: Certain Preserved Mushrooms from the People's Republic of China, 66 FR 31204 (June 11, 2001). Moreover, in response to Gerber's claim that the Department's use of this data in this proceeding is unfair to the respondents and establishes a poor precedent, we maintain that we contacted all of the parties and invited comments on the new information, specifically so that all parties could argue the reasons we should or should not rely upon this information. The purpose behind our filing procedures and regulations is to guarantee that our system is transparent and that all parties may provide insight into our decision-making process. Gerber and all other respondents in this case had the opportunity to comment upon the information contained in petitioners' submissions. We therefore believe that there is good cause for us to use this information, and the means by which we have chosen to apply this information has been fair to all parties. Recommendation Based on our analysis of the comments received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of review and the final weighted-average dumping margins for the reviewed new shippers in the Federal Register. Agree____ Disagree____ ______________________ Joseph A. Spetrini Acting Assistant Secretary for Import Administration ______________________ (Date) ________________________________________________________________________ footnotes: 1. In its preliminary results, the Department did not specifically provide a deadline for submitting case and rebuttal briefs. However, the Department did indicate that it would notify the parties when case and rebuttal briefs would be due after it re-examined the questionnaire responses submitted by the four respondents after the issuance of the preliminary results. Raoping Xingyu elected to submit a case brief 30 days after issuance of the preliminary results. 2. These inputs were citric acid, boric acid, magnesium sulfate, calcium carbonate, and formaldehyde. 3. Shenxian Dongxing and Shantou Hongda submitted their third supplemental questionnaire responses on May 2, and May 4, 2002, respectively.